An independent analysis by Oxford Economics indicates that BAE Systems has significantly bolstered the UK economy, with its activities estimated to have contributed £13.7bn ($18.6bn) to the nation’s Gross Domestic Product (GDP) in 2024.
The findings, presented in the ‘BAE Systems Contribution’ report, show the company’s contribution is equivalent to 0.5% of the entire UK economy.
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Breaking down this contribution, BAE Systems’ operations directly account for £4.2bn of this amount.
The company’s procurement spending is responsible for another £4.8bn, and the expenditure of wages by BAE Systems’ employees and those within its supply chain adds a further £4.7bn to the GDP.
The analysis also highlights that for every £100 generated directly by BAE Systems, an additional £325 is supported throughout the broader economy.
The report follows closely on the heels of the UK’s Strategic Defence Review announcement at BAE Systems’ Glasgow facility.
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By GlobalDataDuring this event, UK Prime Minister Keir Starmer detailed a strategy aimed at generating a ‘defence dividend.’
This initiative is expected to have tangible economic benefits for workers and contribute to the nation’s prosperity, fostering growth that will extend into future generations.
According to the report, BAE Systems supports more than 159,000 full-time equivalent jobs, with nearly 50,000 directly employed in the UK.
The company is currently driving economic activity across its extensive UK supply chain, which includes 5,800 suppliers and entails an expenditure of £5.8bn, thereby supporting employment throughout the nation.
Moreover, the company is creating opportunities in areas where they are most needed, with more than 40% of its UK workforce residing in the most deprived fifth of local authority areas. In these regions, the company has spent £1.3bn with local businesses.
In 2024, BAE Systems is investing £230m in skills development, including £150m for 4,650 apprentices and nearly £50m for graduate training programmes.
These initiatives align with the government’s vision to enhance industrial capacity, create skilled jobs, and drive long-term economic growth through the defence sector.
BAE Systems chief executive Charles Woodburn said: “We work at pace, every day to deliver the advanced, technology-led capabilities the UK’s armed forces need to defend our freedom and strengthen national security, but this report shows that our industry delivers so much more than that.
“We fuel economic growth, creating jobs and prosperity, with the impact extending far beyond BAE Systems to the thousands of companies we work with right across the UK, helping to support growth and a robust, resilient and innovative UK defence industrial base.”
